Adequate charging infrastructure, affordable financing, and a reliable TCO model can help safeguard the interest of gig workers and increase EV adoption
A robust economic growth and the Indian consumer’s ever-increasing proclivity for digital intermediaries has led to a sharp rise in the number of e-commerce companies, aggregators and delivery service providers. At the same time, to curb emissions and meet its climate goals, governments – both at the central and state levels – have been introducing policies and schemes that champion the need for transition of these application-based fleets to clean mobility options, especially Electric Vehicles.
However, in many cases, gig workers who are the backbone of these businesses, are “not prepared” to manoeuvre the hurdles within the EV ecosystem of our country. The Delhi government launched a unique initiative in 2023, named the Delhi Motor Vehicle Aggregator and Delivery Service Provider Scheme 2023 (DMVADSPS) that aims to fasten the EV adoption of these app-based fleets and sets fleet electrification goals using a mix of incentives and disincentives to achieve full electrification of fleets by 2030.
According to an issue brief published by Koan Advisory Group, the DMVADSPS scheme complements the Delhi EV policy and also “stands out as a transition strategy that integrates both incentives and disincentives'', making it crucial to analyse it from a gig workers’ perspective, as it may set the precedent for other states. So let us try and gain some insights about the DMVADSPS scheme and find out its key features.
The scheme mandates businesses that own at least 25 vehicles that include two-, three- and four-wheelers to electrify their fleets by 2030 and includes features like introduction of electric bike taxis with legal recognition as a prerequisite for operation in the city. It also asks firms to implement phased electrification mandates for all categories of vehicles used by them, define licensing criteria for aggregators offering passenger transport and delivery services among others, the brief said.
Fig 1: Gig workers prepare to deliver orders outside Swiggy's grocery warehouse at a market area in New Delhi, India, May 6, 2024. Reuters
Challenges Gig Workers Face on the Road to Electric Vehicle Transition
It has been seen that most often the gig workers, engaged with different companies, own their vehicle and the onus lies on them to comply with the mandates of the Delhi government scheme by themselves. This not only involves transitioning their vehicle into EVs on their own but also procure its PUC by themselves, repay their loan, bear the cost of maintenance of the vehicle along with a host of other responsibilities, making them, rather than the firms, bear the brunt of this transformation.
Despite being at the forefront of having EV infrastructure, there is ample scope of improvement as far as installation of adequate charging stations across Delhi is concerned. As of April 2024, Delhi had 1886 operational public charging stations for 2.89 lakh EVs – an average of about one charging station for every 153 EVs, falling well behind the global average of at least one charging station per 20 EVs, the brief says.
The range anxiety, thus developed, due to lack of adequate charging infrastructure does play heavy on the minds of the gig workers, many of whom charge their vehicles at home. “Given the typical daily commute of delivery riders in India is estimated to be 100 km, E2Ws with lower battery capacities may struggle to cover the distance without a dense charging network. EVs capable of comfortably meeting this demand come at a significantly higher price than equivalent ICEVs,” it said.
The brief argues that many states depend on a mix of state-level incentives to pursue EV adoption, complementing the upfront subsidies provided under the Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles Scheme (FAME - II). Despite making strides, the availability of loans from banks and non-banking financial companies (NBFCs) is limited for EVs compared to ICEVs.
There is also a lack of understanding of new variables like battery depreciation and safety risks associated with lithium-ion battery technology. To mitigate these potential losses, “financers offer lower loan-to-value (LTV) ratios, imposing higher interest rates, and shorter loan tenures aligned with battery warranties”, thus aggravating problems further for the gig workers. Uncertain resale value of used E2Ws, inadequate charging infrastructure and fewer financing options for new purchases leads to high Total Cost of Ownership, which burdens the workers as well.
Fig 2: A gig worker out for delivery. Pic credit : Mint
Ensuring a Smooth Ride: Strategies for a Successful EV Transition for Gig Workers
- TCO considerations: Since TCO is higher for E2Ws, the brief argues that Delhi must adopt an enlightened approach by incorporating TCO considerations into its mandates for EV adoption. This can be pursued by engaging in nuanced discussions with gig workers in the EV promotion strategy.
- Providing Incentives: The governments, both at the Centre and in Delhi, should prioritise incentives to ease financial burdens on intermediaries and gig workers which can serve as catalysts for increasing EV adoption rates.
- Alternative Models for Owning EVs: One of ways is to retrofit any e-two wheeler. Despite concerns about battery safety, installation costs etc, any ICE two wheeler can be retrofitted at half the price of a new model.
Battery swapping also helps reduce the initial cost of the vehicle, as batteries constitute over 40 percent, or nearly half, of an EV’s total price. However, lack of standardisation, diverse battery pack designs, short commercial battery life and safety considerations remain areas of concern. “EV leasing is another promising ownership model, freeing gig workers from upfront and maintenance costs,” it adds.
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